Pennsylvania’s revenue generated from gaming and fantasy contests increased nearly 9% in July, the Pennsylvania Gaming Control Board (PGCB) reported Thursday.
The total revenue generated from all forms of gaming, along with fantasy contests for the month was $467,043,707, an increase of 8.85% compared to revenue generated in July 2022. Sources of gaming revenue regulated by the PGCB include slot machines, table games, internet gaming, sports wagering, fantasy contests and video gaming terminals (VGTs).
Total tax revenue generated in July 2023 through all forms of gaming and fantasy contests was $192,042,819.
The state’s slot machine revenue for the month was $214,668,942, which represents a 0.36% increase in revenue when compared to the $213,902,072 from July of last year. The number of slot machines in operation in July 2023 was 25,291 compared to 25,684 in July 2022. Tax revenue from the play of slots machines in July 2023 was $108,615,940.
The revenue for retail table games decreased to $83,415,677, a drop of 4% from the July 2022 total of $86,683,278. Total tax revenue from table games play during July 2023 was $13,605,377.
Internet gaming (iGaming) increased 35%, generating gross revenue of $132,859,997 in July 2023 compared to $98,570,749 in July 2022. Tax revenue generated from internet gaming play during July 2023 was $57,297,185.
Total sports wagering handle revenue in July 2023 was $338,450,263, a 0.58% increase over the total of $336,507,932 last July. The taxable revenue figure for July 2023 increased to $32,089,785, a 26% increase over the July 2022 revenue of $25,444,500. Tax revenue generated from sports wagering during July 2023 was $11,552,323.
The adjusted revenue for July 2023 for VGTs was $3,353,420, a decrease of 7.23% from the July 2022 revenue of $3,614,578. VGT operators by the close of July 2023 were operating the maximum permitted five machines at 69 qualified truck stop establishments, compared to five machines at 66 establishments at this time last year. Tax revenue collected from VGTs in July 2023 was $873,611.
Fantasy contests revenue for July 2023 was $655,886, a decrease of 24% from the July 2022 revenue of $858,569. Tax revenue collected from the play of fantasy contests in July 2023 was $98,383.
Pennsylvania’s casinos had a record year for fiscal year 2021-22.
The Pennsylvania Gaming Control Board reported that gaming took in $5,042,967,392 in revenue.
It was the first-time overall revenue for games topped $5 billion during a fiscal year.
The combined tax revenue from these games during the fiscal year will also top $2 billion for the first time. The estimated amount, prior to any adjustments by the PA Department of Revenue is $2,052,630,568.
The previous high for gaming revenue and tax revenue in a fiscal year was during 2020/2021 was $3.87 billion and $1.59 billion respectively.
The board notes said the overall revenue increase from the previous high fiscal year can be attributed to a record high in revenue for table games, along with continued growth in the Sports Wagering, iGaming and Video Gaming Terminal markets.
Fiscal Year 2021/22 gross revenue from slot machines at the casinos was $2,410,313,212 a 27.69% increase in revenue when compared to the $1,887,573,437 generated in Fiscal Year 2020/21.
Gross revenue from table games at the casinos was $1,015,735,661, a 40.73% increase in revenue when compared to the $721,763,471 generated in Fiscal Year 2020/21, a record for a fiscal year.
Revenue from iGaming was an $1,232,309,138, a 37.35% increase in revenue when compared to the $897,216,020 generated in Fiscal Year 2020/21, a record high for a fiscal year.
Revenue from sports wagering was $315,716,247, a 2.22% increase in revenue when compared to the $308,849,184 generated in Fiscal Year 2020/21. That’s a high mark for a fiscal year.
Revenue for Video Gaming Terminals at Truck Stops was $41,584,158 an 32.71% increase in compared to the $31,334,744 in Fiscal Year 2020/21 also a record high. However, at the end of this fiscal year, there were 65 VGT facilities operating in Pennsylvania compared to 50 facilities in operation at the end of Fiscal Year 2020/2021.
There was one drop. Revenue from fantasy contests was $27,308,782, a 3.11% decrease in revenue when compared to the $28,186,529 generated in Fiscal Year 2020/21.
Revenue from all types of gaming across the state reached its highest level in a single month in March.
The Pennsylvania Gaming Control Board said revenue from all forms of gaming along with fantasy contests totaled $462,740,098.
The previous high revenue month occurred in November 2021 at $432,490,129.
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The record was driven by all-time highs in two gaming sectors including Retail Table Games which exceeded $90 million for the first time, and Internet Casino-Type Gaming which exceeded $110 million for the first time, the board said.
Sources of gaming revenue regulated by the Pennsylvania Gaming Control Board include slot machines, table games, internet gaming, sports wagering, fantasy contests and video gaming terminals.
Total tax revenue generated collectively through all forms of gaming and fantasy contests was $187,018,857 during March 2022.
March’s gross revenue from slot machines was $214,721,028, a 7.74% increase when compared to the $199,290,530 generated in March 2021. The number of slot machines in operation in March 2022 was 26,107 compared to 19,727 in casinos in March 2021, according to the report.
Tax revenue from the play of slots machines in March 2022 was $109,706,835.
Table games revenue for March 2022 was $915,194,410. The March revenue total was the highest to date topping the previous record of $89,078,876 achieved in October 2021. Total tax revenue was $15,194,410.
Internet Casino-Type Gaming (iGaming) revenue Casino games offered online generated gross revenue of $118,118,408 during March 2022 compared to $97,689,743 in March 2021, an increase of 20.91%. The tax revenue was $48,973,608.
The March revenue total was the highest to date, topping the previous record of $108,310,642 achieved in January 2022.
Total sports wagering revenue was $714,976,578 or 27.62% above the March 2021 total of $560,259,181. At the same time, the taxable revenue figure for March 2022 was $30,400,581 compared to $29,352,345 in March 2021.
Fantasy Contests revenue was $1,390,443 in March 2022, a decrease of 22.71% over March 2021, when revenue was $1,798,983.
All tax revenue figures reflect the amount generated prior to any adjustments by the Pennsylvania Department of Revenue.
A significant job generator in the commonwealth, casinos and the other types of Board-regulated gaming is expected to generate over $2 billion in tax revenue during the 2021/2022 state fiscal year.
Legalized gaming in Pennsylvania had a record year in 2021, with the Pennsylvania Gaming Control Board reporting revenue increases in nearly every sector of the industry.
For the year, the combined revenue of slot machines, table games, sports wagering, iGaming, video gaming terminals (VGTs) and fantasy contests totaled $4.7 billion compared to $2.7 billion in 2020. This also resulted in record tax revenue production from gaming of more than $1.93 billion.
The Board did note that the significant year-over-year increase in gaming revenue was impacted by closures and safety measures at casinos related to COVID-19 during 2020. Total closure days in 2020 were 1,473 compared to 44 days in 2021.
Statewide, slots were up 68.71% to $2.3 billion. Table games were up 83.4% over 2020, taking in $925 million.
2021 revenue from sports wagering was $340 million, a 79.29% increase in revenue when compared to the $190 million generated in 2020. Sports wagering handle, the amount wagered through both retail and online, was $6.55 billion, an 83% increase over 2020’s handle of $3.58 billion.
2021 revenue from fantasy contests was $29.3 million, a 38.54% increase in revenue when compared to the $21.2 million generated in 2020.
2021 revenue for iGaming was $1.1 billion an 96.7% increase in revenue when compared to the $566 million generated in 2020. At the end of 2021 there were 10 iGaming certificate holders in Pennsylvania.
While a smaller source of revenue, video game terminals, found in truck stops, did have a significant increase in 2021.
2021 revenue for VGTs at Truck Stops was $40 million a 139% increase in revenue when compared to the $17 million generated in 2010. By the end of the year there were 60 VGT facilities in Pennsylvania.
The Pennsylvania Gaming Control Board has released a 10-page guide outlining what is expected of the state’s casino operators prior to re-opening their facilities in the wake of the COVID-19 pandemic.
The new rules include separating slot machines and keeping poker rooms closed for a little longer because of the need for players to touch cards and chips.
Other requirements include establishing a pandemic safety officer who will serve as a point of contact for the board to ensure that all U.S. Centers for Disease Control and Prevention and state Health Department requirements regarding COVID-19 are followed, and requiring patrons to wear masks.
Because of the impact on security, patrons should be discouraged from wearing hats inside the casino and may be asked to briefly remove masks or hats for identification.
Health checks will also be conducted by security staff at casino entrances.
To encourage distancing at slot machines the board is encouraging casinos to either place Plexiglas barriers between machines, disabling some machines or remove seats to keep patrons further apart.
Table games should be set up to maximize distance between players.
“While these guidelines for casino operations will be subject to amendment as we move closer to a time of reopening, we believe this plan will be effective in mitigating and reducing the risk of exposure to COVID-19 for all employees, patrons, and other guests,” said board director, Kevin O’Toole in a release.
The board is also calling for employee training on COVID-19 mitigation and is ordering the same type of social distancing signs and guides and availability of hand sanitizer that many other facilities have been using.
Extra cleaning and sanitizing protocol must be established.
The casinos must also issue frequent reminders to employees of the procedures and stagger shifts and breaks so that there’s no large group of employees congregating at any one time.
Casinos have also been looking at their own reopening plans. Wind Creek Bethlehem, for example, has said it is considering having players make appointments to come to the casino to better control crowds.
With online sports betting just getting out of the gate in Pennsylvania, the numbers aren’t telling the story of its revenue potential quite yet, according to experts tracking the sector.
And despite what may look like a slow start, people who have been studying online sports betting and watching Pennsylvania’s foray into the industry have high expectations.
One website, playpennsylvania.com, which has been tracking online gaming trends, projects that in five years the online sports betting industry will generate $500 million a year in revenue for Pennsylvania.
For now, though, Dough Harbach, spokesman for the Pennsylvania Gaming Control Board, said online sports betting has really only just begun, with the first Pennsylvania casino launching online betting in May.
Overall, the total wagering amount was $19.3 million for online sports betting in June compared to the more the $27 million wagered in-house at casinos.
The revenue amount was also very small. For that $19.3 million wagered, revenue was only about $1.4 million.
“It’s going to take some time and additional rollout for us to really gauge what all these numbers mean,” Harbach said.
Ramping up
Currently, only three of the eight casinos in the state that offer sports betting have online operations: SugarHouse in Philadelphia, Parx in Bensalem and Rivers in Pittsburgh: A fourth, Valley Forge in King of Prussia, was expected to be online by press time.
SugarHouse Casino offers a sports betting app through Rush Street Interactive (Photo: Submitted)
So the total amount wagered, while smaller, came from three as compared to eight casinos, and the majority came from one casino, SugarHouse, which was the only casino that was operational for all of June.
Also, revenue numbers are lower for the starting months because of promotional credits being offered by the casinos.
Parx Casino, for example, is offering a free initial $10 bet and up to $250 in credit with a deposit into a sports betting account.
Harbach said as bettors take advantage of those early offers it cuts into revenue, so some casinos might even have their spending on credits outpace revenue for the first few months.
But there are several factors that indicate numbers should skyrocket in the next few months.
First is the demand in New Jersey, which began offering online sports betting about a year ago.
“If you look at New Jersey 75 percent of wagering is now being performed through online sources,” Harbach said.
In that first year New Jersey had $1.2 billion in wagering for $204 million in revenue.
Pennsylvania has a larger population, with 12.8 million people versus 8.9 million in New Jersey.
“The fact that Pennsylvania is such a big state is part of what makes people excited,” said Jessica Welman, editor for PlayPennsylvania.com.
She noted that online sports betting in New Jersey is now so popular it eclipses in-house betting.
In June, New Jersey had $227 million in online sports bets compared to $46 million in-in house bets.
In Pennsylvania – where only eight casinos currently offering sports betting, but many more scheduled to do so – the entire amount bet on sports was $46 million for the month.
“The growth potential is huge for Pennsylvania,” she said.
Facilitated by tech
New technologies coming onto the market should also make it easier for people to make sports bets online, Welman said.
She noted that at the start of sports betting late last year in Pennsylvania, bets could be made only by physically going to a sports book inside the eight casinos that offered them.
With the start of online gambling, bettors can make wagers anywhere in the state. The sites verify that bets are being made within Pennsylvania borders using geolocating technology.
And casinos can offer mobile sports betting using the popular Apple platform.
Chicago-based Rush Street Interactive provides a mobile sports betting app to both SugarHouse and Rivers casinos.
Rush Street’s president, Richard Schwartz, said Apple has been slow to approve sports betting apps, but his company was able to get its app approved, making the company the first to offer mobile sports betting in Pennsylvania for Apple devices.
Since SugarHouse has locations in Pennsylvania and New Jersey, Schwartz said, bettors can download the apps in both states and use the app corresponding to the state where they are.
The sports betting app being developed for Valley Forge Casino by FanDuel promises to make it even easier. Its app can automatically locate the bettor and steer bets to the proper state’s sports book – New Jersey or Pennsylvania.
Schwartz said online and mobile betting may help in marketing bricks-and-mortar casinos.
Sports bettors, mostly men, tend to be about 10 years younger than the average casino patron, and some may never have visited an actual casino, he said.
“They may never have played a casino game, but this is a new attraction so it’s a point of entry for marketing, and is a great marketing tool to get people to experience the property,” Schwartz said. “They may bet online but when they want a night out on the town they come back to the property.”
Welman also noted that a big boost in betting should come later in August when football seasons starts. Football is the most popular sport for wagering in the U.S.
“That’s when I think the numbers will really explode,” she said.
Also by that time, PlayPennsylvania.com expects several more casinos will be offering betting apps, including Mount Airy Casino in Mount Pocono.
Some questions remain, such as will Pennsylvania’s online gaming growth affect New Jersey’s successful sports betting market?
Welman said that many people, especially those living in communities close to the Pennsylvania/New Jersey border, like the Lehigh Valley, may be inclined to make bets in both states now that they have an option. That could impact both states.
Pennsylvania’s tax rate on sports betting could also influence how many of the state’s 12 casinos open their own sports book.
Pennsylvania taxes sports betting at 34 percent, the highest of all states that allow sports betting. In Nevada, by comparison, the rate is 6.7 percent.
A number of casinos have yet to decide whether they will offer sports betting.
Wind Creek Casino Resort in Bethlehem, for example, does not currently have a sports book and its operators told the gaming control board at a recent hearing that they were still considering their options.
Pictured is a screenshot of the Pennsylvania Lottery’s website for iLottery games.
As Pennsylvania prepares to roll out online casino-based gambling in July, a group of seven commonwealth casinos are seeking to stop the Pennsylvania Lottery from continuing to offer certain online games.
The coalition has a filed a preliminary injunction with Commonwealth Court to stop the state Department of Revenue, which oversees the Lottery, from offering casino-style games that “imitate the look, sound, player experience and payouts of slot machines.”
The injunction follows a lawsuit filed last August that argued that the Lottery has unfair advantage over the casinos. Casino operators must pay $10 million license fees to offer online casino games, plus they will pay high tax rates of 54 percent and 16 percent, respectively, for online slot machines and table games.
The casinos, including Hollywood Casino at Penn National Race Course, contest they were given the exclusive right to offer these online games under the state’s 2017 gambling expansion law. The Lottery, meanwhile, was permitted to run other online games to generate additional revenue as gambling options have also grown to include smaller satellite casinos and sports betting.
But since the iLottery debuted last May, the casinos say they have found the following issues:
Nine iLottery games have the same titles and/or themes as slot machines offered on Pennsylvania casino floors or online casinos in other states.
iLottery games have an average payout of 85 percent, which is the minimum payout percentage for slot machines in Pennsylvania. Traditional lottery games have a 40 percent minimum payout.
Several iLottery games offer bonus games and free spins, mirroring the play of slot machines.
The state’s own vendors refer to the iLottery games as slot machines. The Department of Revenue also required its game supplier to not sell the same games to Pennsylvania casinos, effectively admitting these are casino games that would otherwise be sold to and offered by casino operators.
At least 22 of the iLottery games are certified for compliance with casino gaming standards in other jurisdictions, including the United Kingdom’s Gambling Commission and New Jersey’s Internet and Mobile Gaming regulations.
“Pennsylvania casinos are not opposed to iLottery — only simulated, casino-style games,” said coalition spokesman David La Torre. “In fact, casinos are supportive of the lottery’s mission and provide space for lottery ticket vending machines on their casino floors. Some have become the best-selling outlets of lottery tickets in Pennsylvania.”
Jeffrey Johnson, a spokesman for the Department of Revenue, said the department believes the iLottery games are being operated in accordance with the 2017 law.
“We are working every day to ensure the Pennsylvania Lottery continues to fulfill its mission of responsibly generating profits for senior programs,” he said.
This story has been updated to include comments from Jeffrey Johnson.
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